Marketing Research

MKTG 440

The Marketing Research Process

For the first 5 minutes of class, read and ponder…

Discussion Questions:

  • Why did companies like Disney+ and Netflix add ad-supported tiers and account sharing fees?

  • How have your streaming habits changed over the past five years?

  • Which of the big players in streaming (Netflix, Amazon, HBO, Disney, Apple, etc.) will be the most successful over the next 10 years? Why?

  • What other changes could streaming companies make to improve business?

  • What research did these companies do to inform their decisions?

Netflix loses 970,000 subscribers, says ads and new fees are key to recovery. (Ars Technica)

Stock performance (2018-2023)

Netflix recovery

Agenda

Today’s topics

  • Questions on the syllabus?
  • Names
  • D2L
  • The marketing research process
  • My marketing research
  • Team project details

The Marketing Research Process

The marketing research process flow

Scientific investigation by a different name

Basic Scientific Investigation

Step 1: Formulate a testable hypothesis

Step 2: Select the research method and design the study

Step 3: Collect the data

Step 4: Analyze the data and draw conclusions

Step 5: Report the findings

Marketing Research

Step 1: Identify a problem/question

Step 2: Select the research method and design the study

Step 3: Collect the data

Step 4: Analyze the data and draw conclusions

Step 5: Implement findings

Why not managerial intuition and educated guesses?

Human decision-making biases

  • People are not very good at learning from experiences.
  • People have poor intuition for the dollar value of information.
    • UPS ORION system saved $300 million in its first year
  • People are biased in how they process complex information.
    • Overconfidence: ~93% of American drivers rate themselves as better than the median.
    • Availability bias: People judge the likelihood of an event by the ease with which examples come easily to mind.
      • Q: “If a random word is taken from an English text, is it more likely that the word starts with a K, or that K is the third letter?” (Kahneman & Tversky)
    • Comparative-optimism effect: Good things are more likely to happen to me than to others, whereas bad events are less likely to happen to me than the others
    • …

Step 1: Identify Problems and Define Research Questions

The iceberg principle

  • Managers (decision makers) focus on obvious, measurable symptoms.

  • Researchers, who deal in information, must focus on an intimate view of the company’s inner workings (root problems).

Management vs. research questions

  • Management question: A question relating to managerial outcomes.

  • Research question: A question relating to information needed by the decision maker to help inform a manager’s business decision.

Management questions
(symptoms)		 Marketing research questions
(root problems)
• How do we increase market share?
• How do we decrease churn?		 • What are the drivers of choice and switching (price/quality/convenience/etc.)?
• Which segments are we underperforming in, and why?
• Where in the funnel are we losing customers?
• What are the main reasons customers leave, and which are preventable?

Problem framing

Problem framing framework

New Coke: Marketing research gone wrong

Business Problem

  • 1984: PEPSI was the “Choice of a New Generation”
  • After nearly a century, Coke market share Dropping
  • What should poor Coca-Cola Co do?

1985: Launch of “New Coke”

  • Almost 200,000 taste tests conducted with a budget of $4M
  • New formula is clearly preferred by respondents in blind taste tests against both Pepsi AND existing Coke

The Aftermath

  • Within 80 days Coke re-introduced “Coke Classic”
  • Shortly thereafter, “New Coke” was pulled from shelves
  • “What these tests didn’t show, of course, was the bond consumers felt with their Coca-Cola — something they didn’t want anyone, including The Coca-Cola Company, tampering with.” (Coke’s website)

Problem framing methodology

The four-step process

  1. Meet with the client
  2. Clarify the Driving Challenge (problem/opportunity)
  3. State the Manager’s Business Decision problem
  4. Develop and agree on Research Objectives

1: Meet with the client

Gather as much information as possible about problem.

  • What is the problem/opportunity you’re facing?
  • What caused you to notice the problem? Can you share the evidence/information you have?
  • What factors do you think have caused this situation?
  • What is likely to happen if nothing changes in the next 12 months?
  • What do you hope to accomplish using MR?
  • What actions will you take based on the MR?

2: Clarify the driving challenge

Use “Problem/Opportunity” framing.

  • Take the Consumer’s perspective
  • Challenge pre-existing assumptions → what is the true nature of the problem?
  • Break out of “normal thinking” (routine way to look at a situation)
  • Potentially use observation or qualitative research at this stage

Problems and opportunities

Problem: Negative outcome unless addressed.

  • competitor introduced something into the marketplace
  • declining sales/loss of market share
  • service crisis
  • respond to off-label use

Opportunity: Potential for positive outcomes.

  • unmet needs/hacks
  • potential new product launch
  • expand to new markets
  • target new segments
  • increase revenues

Driving challenges examples

  • New business ideas
    • Examples: I want to start a new restaurant, clothing line, retail outlet, etc.
  • Social/charitable/policy causes
    • Examples: increasing support for a cause, getting students to vote, promotion strategies for specific organizations
  • Problem or opportunity with a campus organization, team, club
    • Examples: low turnout at sporting events, low attendance in clubs, participation in activities
  • Problem or opportunity at Eller
    • Examples: Mental health concerns, food options, curriculum, increasing enrollment, increasing post-graduation support

3: State the manager’s business decision

  • The basic decision facing the manager, which marketing research can help with
    • Takes the manager’s perspective
    • Usually involves insightful understanding of the consumer
    • Is stated simply
    • Is usually a question (Why? What? How? Which?)
    • Don’t over-think it

Examples:

  • Should we monetize content with ads or subscription fees?
  • What features would consumers most love in the next release?
  • Which of these possible promotions should we invest in?
  • Should we launch this new product?
  • Which segment should we target with the next generation?

Manager’s business decision examples

Driving Challenge Manager’s Business Decision
New business ideas
Examples: I want to start a new restaurant, clothing line, retail outlet, etc.		 Go / no go?
Social/charitable/policy causes
Examples: increasing support for a cause, getting students to vote, promotion strategies for specific organizations		 Which Promotional messages or marketing strategy?
Problem or opportunity with a campus organization, team, club
Examples: low turnout at sporting events, low attendance in clubs, participation in activities. Promotional spending for Bear Down Music Festival		 Which Marketing strategy or marketing mix?
Problem or opportunity at Eller
Examples: Mental health concerns, food options, curriculum, increasing enrollment, increasing post-graduation support		 Which messaging or marketing strategy?

Types of business decision problems

Discovery-oriented (descriptive):

  • Often an attempt to understand unplanned changes in environment
  • Basic information, understanding the consumer
  • Often early stage, insights based, foundational
  • Qualitative / Exploratory
  • “What, Why”

Examples:

  • Why are my consumers defecting to the competition?
  • What are the target market’s unmet needs?

Strategy-oriented (prescriptive):

  • Often supporting planned changes
  • Choice among alternative paths
  • Better geared toward reducing uncertainty
  • “How, Which one”

Examples:

  • How should we advertise to this market?
  • Which pricing plan will best prevent churn?

4: Develop research objectives

A Research Objective:

  • Restates the managers’ business decision in research terms.
  • States specific information that must be collected to improve decision quality

Has a 2-part structure:

  1. Usually begins with an action word (can also be a focused question)
    • Discovery action words – Understand, Explore, Investigate, Discover, Map, Document, Learn, Describe
    • Strategy action words – Decide, Test, Measure, Demonstrate, Determine, Quantify
  2. Describes specific information about the target consumer that the research will investigate.

“Information” about the target consumer

What information can we collect about the consumer that will help us make insightful recommendations for our client?

  1. Personality traits/lifestyle characteristics (aka Psychographics): Empty Nesters, Urban Professionals

  2. Attitudes (towards product categories, brands, sites, retailers, campaigns, formats, channels, etc.)

  3. Intentions (anticipated or planned future behavior): Weak evidence, but often as good as we can get.

  4. Motivations: Needs, wants, urges, wishes, drives, impulses, etc.

  5. Behavior: Usually purchase and use, but also shopping, advocating, etc.

  6. Awareness/Knowledge: of advertisements, campaigns, products, policies, firms, etc.

Example research objectives

Example: ZonaZoo

The ZonaZoo was started in 2002 and implemented in 2003. Since its startup, membership has increased at an unprecedented rate, and the ZonaZoo has become the largest student section in the PAC-12. The ZonaZoo has helped to create a tighter knit campus and community. The “Sea of Red” is a force to be reckoned with.

Problem/Opportunity: Fewer upperclassmen attend UA Games

Business Decision Problem: How do we stop ZonaZoo sales from decreasing for each year that students are at the University?

Note: This slide is from a student project!

ZonaZoo research objectives

Manager’s Decision Problem: How can we stop ZonaZoo sales from decreasing for each year that students are at the University?

Phase 1 (Discovery-Oriented) Research Objectives:

  • Understand football watching habits of upperclassmen
  • Determine current perceptions of ZonaZoo in target markets

Phase 2 (Strategy-Oriented) Research Objectives:

  • Which promotional strategy should we choose to increase Zona Zoo sales among upperclassmen?
  • How should we price ZZ for seniors?

Example: Long sleeve SPF swimsuit

Driving Challenge (Problem or Opportunity)? Is there a market for a Long Sleeve SPF Swimsuit in USA?

Manager’s Business Decision: Go/No Go - Should I invest 10K to produce/import the first batch of prototypes? If so, what kind of prototype should I invest in? Who should I target?

Research Objective: Your Turn

More practice

Driving challenge → problem framing

  1. A beverage company wants to launch “plastic-neutral” packaging as a way to differentiate the brand. Executives are considered about credibility, and the risk of greenwashing-related backlash.

  2. A streaming service tightens password-sharing rules and raises prices. Sign-ups hold steady, but churn within the 18–24 segment jumps. Leadership wants to retain younger users without discounting the whole service.

  3. A big-box retailer locks up more products to reduce shrink. Shrink falls, but conversion drops in the same aisles. The store VP asks: “What’s the right balance between security and sales?”

My marketing research (Intro Survey)

Course improvement research

Management questions:

  • What are my students’ abilities and expectations? (descriptive)
  • How can I make MKTG440 better? (strategy)
  • How can I be better? (strategy)

Research objectives:

  • Understand students’ prior knowledge (Q on stats)
  • Understand whether I am overworking my students (Q on expectations)
  • Determine whether my examples are relevant/interesting (Q on social, experience, career goals)
  • I don’t know what I don’t know… (open-ended Q on professors)

Survey results 1

Survey results 2

Best professors?

Expectations?

Career goals?

What students want

Class Dos:

  • Interactive/engaging/passionate
  • Relevant/real-world examples
  • Review material if necessary
  • Group work opportunities
  • Clear assignment expectations
  • Fair grading policies
  • Extra credit a bonus

Professor DOs:

  • Available/quick to reply
  • Caring/understanding
  • Engaged

Class DON’Ts:

  • Constantly changing expectations
  • Too fast
  • Too much reading
  • ← the opposite of those

Professor DON’Ts:

  • Requires attendance
  • Goes too fast through material
  • Never available
  • Distant (non-engaged)

Team Project Overview

Timeline and process

  • Brainstorm topics
  • Everyone submits a team project topic nomination by Sunday night on D2L
    • Indicate interest in pitching
    • If you developed this idea with collaborators, feel free to list names (not a commitment)
  • IMPORTANT: If you want to pitch a topic, submit the survey by Friday at 12pm
    • I will contact those selected to pitch by end of day Friday
    • Based on (a) strength of interest and (b) topic suitability
  • Next Monday – pitch!
    • 1-2 minutes to pitch your idea + recruit a great team!
    • Key points: passion domain, problem or opportunity, potential impact
    • Audience: ask any clarifying questions
  • Low key and fun! No stress!
  • Afterwards, everyone will rank-order their interest in the pitch topics
    • Teams announced Wednesday

Brainstorm session on team project topics

Step 1: Passion domain

  • What is an industry, firm, campus organization, workplace, new idea, cause, political issue, etc. that you care about or find interesting?

Step 2: Driving challenge (problem/opportunity)

  • What is a big picture business problem or opportunity in the passion domain that you are interested in?

Step 3: How can marketing research help?

  • Imagine you are building a survey to collect information relevant to the driving challenge.
  • What are 1-3 questions you could ask consumers that would help inform a business decision related to the driving challenge?